MNI BRIEF: Fed's CIE Inflation Expectations Rises To 2-Yr High

The Federal Reserve Board's Index of Common Inflation Expectations, an internal gauge of longer run inflation expectations constructed from two dozen other indicators, jumped to the highest since mid-2023 in the first quarter. 

The CIE Index rose 0.09ppt in the first quarter, according to Fed data released Friday. The series combines market and survey measures into a single view of how households and businesses expect prices to behave over the next decade and the measure goes back to 1999. Over the past quarter century that the index has been available, a rise of 0.1%ppt is associated with a 1%ppt rise in core PCE inflation, according to recent research from JP Morgan. (See: MNI INTERVIEW: Inflation Expectations Surge, Troubling For Fed)